Read Larry Connors' blog – Short Term Trading Strategies
The Merced-based publicly traded firm will delay filing the report while it tackles complex accounting issues, including further evaluating troubled loans.
It expects to file the report by Monday and blames troubled loans on property and development projects as the driving force behind the losses. "It's a continued weakness in property values across all sectors in the Valley," Cupp said.
Capital Corp is expecting the loans to cost it $7.5 million in the third quarter, which ended Sept. 30, and $22.8 million for the past nine months.
County Bank never carried any subprime mortgages that have plagued some of the nation's top lenders. However, it lent money to construction companies and developers, two sectors hit hard by the housing crash.
County Bank's parent company projects a net loss of $12.4 million since the beginning of the year. That contrasts with the first nine months of 2007, when it posted a net income of $10.6 million.
However, as the housing market crashed and economic climate worsened, it posted a $3.6 million loss, its first ever, for all of 2007.
The company's stock, closing Thursday at $1.98 a share, hit an all-time low earlier in the afternoon of $1.86. Its peak within the last 52 weeks was $20.
Despite repeated phone calls, none of the outside industry analysts who follow the firm was available for comment.
Besides looking for private investment, the company applied to sell up to $46 million in stock to the U.S. Treasury under the Troubled Asset Relief Program.
Applying for the aid had been in the company's plan to boost its on-hand cash. The bank is "adequately capitalized," Cupp said, though its goal is to be well capitalized. "We had planned this for some time," he said. "It's not a last-minute approach."
Today is the application deadline for bailout funds. Cupp is unsure when banks will learn whether they'll be able to sell stock to the government.
Another major Valley financial institution, Sierra Bancorp, decided against applying for any of the bailout money, though it could have been eligible for $32 million.
The holding company runs Bank of the Sierra, which has 22 branches from Fresno to Bakersfield.
The Sierra board decided it didn't need the money and noted it would face federal restrictions if it tried to declare dividends or repurchase stock if it was part of the bailout.
"This has been described as 'cheap capital' if needed, but in reality equates to expensive debt if it cannot be quickly utilized," Sierra officials said in a statement.
As with any business in tough times, Cupp said Capital Corp of the West is running carefully and efficiently, focusing on its customers and 39 branches across the Valley and Bay Area.
"We're going through a tremendous upheaval in property values in the Valley," Cupp said. "I'm still bullish (about the area) -- always have been."
Reporter Scott Jason can be reached at (209) 385-2453 or sjason@mercedsun-star.com.
To see more of the Merced Sun-Star or to subscribe to the newspaper, go to http://www.mercedsunstar.com. Copyright (c) 2008, Merced Sun-Star, Calif. Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
More News:
Market Updates |
Stock Alerts |
All Trading News |
Stock Index
About TradingMarkets | Contact | Advertise | Careers | Link to Us | Site Map | Help | Terms & Conditions | Privacy Policy | Return Policy | Testimonials | Feedback
The Connors Group, Inc. ("Company") is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company's website, or in its publications, are made as of the date stated and are subject to change without notice.
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company's products (collectively, the "Information") are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Company's website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHER SLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.
The Connors Group, Inc.
15260 Ventura Blvd., Ste. 2200
Sherman Oaks, CA 91403
© Copyright 2009 The Connors Group, Inc.
